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My hon. Friend drew attention to the visit and to the comments of our erstwhile colleague, Sir Leon Brittan. He said only a few weeks ago that firm control can ensure that the benefits derived from state aids will outweigh any distortions of competition. He pointed to recent work by the Commission to identify the full extent of aids granted by the different member states. My hon. Friends will be pleased to know that the United Kingdom came out of the analysis relatively well.
Since the early 1980s, the level of United Kingdom subsidies has been on a firm downward trend, while that in other major member states has been upwards, in some cases markedly so. My hon. Friend referred to some of those countries. The Commission believes that little of the aid has been accompanied by positive benefits, that it has simply served to cancel out similar aids in other member states. The Commission therefore intends to review all existing aid schemes, as well as new schemes for which the Commission's approval is being sought. Without a firm and comprehensive policy of this kind, Sir Leon saw little possibility of completing the single market, and he committed himself to allowing undistorted competition to play its rightful role. The Commission's analysis is not yet complete, but Sir Leon has said that it is already clear to him that urgent action is needed, and clear also where changes have to be made.
My hon. Friend made several references to cases and countries that he knows of, and to the figures involved. Sir Leon is addressing the matter in the terms that my hon. Friend has talked about. I trust that in due course, although it may take longer than my hon. Friend and I wish, we will be able to resolve the problem. I can assure the House and my hon. Friends that the Commission will have the Government's full support in its work. The creation of the single market requires no less if we are to secure its benefits.
Column 1038The position of individual British companies must also be considered when they run up against unfair competition from elsewhere in the Community. It is worth distinguishing here between subsidies which are illegal--that is, those that have not been notified to the European Commission or are not covered by an approved scheme--and subsidies that have been notified and approved by the Commission. In the case of illegal subsidies, the Government will do their utmost to pursue with the Commission the cases of British firms which have suffered because of illegal subsidies granted to their competitors. My officials are always ready to discuss with firms what it takes to mount a persuasive case. The main requirement is to obtain hard evidence that the European competitor has received a subsidy and that the subsidy is likely to fall outside schemes which have been approved by the Commission. This is an area in which the Commission is particularly concerned, and I have every confidence that it will follow up complaints to the best of its ability. It has at its disposal the range of sanctions to which I referred earlier. In the case of legal subsidies, the scope for immediate action is more limited, but where subsidies can be shown to put British firms at a disadvantage, we may be able to persuade the Commission that wider Community principles are at stake. As Sir Leon Brittan said, the Commission is concerned about the high level of subsidies which it has itself approved over the years and it intends to review these comprehensively. The Government would certainly urge the Commission to give priority to those which clearly disadvantage British companies as well as distorting trade within the Community more generally.
To sum up, the Government believe that rigorous and even-handed enforcement of the state aid rules is crucial to securing free and fair competition within the European Community. That in turn is vital for creating and maintaining a genuinely single market in Europe. We shall do our utmost to ensure that British firms have the opportunity to share in the benefits which an open market can bring.
Both of my hon. Friends the Members for Harlow and for Ilford, South, who have addressed the House cogently and articulately on the problem, are to be congratulated on the concern that they have shown for their constituents. They have my assurance that I and other Ministers in the Department of Trade and Industry will do all we can to ensure that British companies get a fair crack of the whip on an even playing field or, indeed, according to any other analogy that can be drawn.
I am grateful that my hon. Friend the Member for Harlow has seen fit to draw this matter to the House's attention. If he or a company in his constituency or that of my hon. Friend the Member for Ilford, South can find the hard evidence, I assure them that we shall wage war to the highest possible level to ensure that all is fair in that difficult area.
Question put and agreed to.
Adjourned accordingly at fifteen minutes to One o'clock.
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